If you have received a notice of audit from the IRS, you are likely curious how far back they are going to look. It is natural that they may want to audit you if there are questions about your most recent tax return.
But what about returns that you submitted in previous years? Should you be worried about the impact of the audit on tax returns you filed a decade ago?
As a general rule, you do not have to concern yourself with tax returns going back more than a few years. The IRS usually tries to conduct an audit as quickly as possible, and most of them address tax returns from just the past two years.
3 to 6 years
That said, while the goal is to look at returns from the past two years, the statute of limitations may be extended beyond that.
In many cases, the IRS has the option to go back three years to conduct the audit. If this does not provide a satisfactory result, they can sometimes ask to extend the statute of limitations.
But even if they do ask for this extension, they generally only ask for another three years. This means that they are usually not going to look at anything that is more than six years old.
This is why it is a common piece of advice to keep documentation going back seven years. As long as you do this, you know that you always have the proper documentation on hand to address even the most lengthy audit that the IRS would be expected to conduct. This covers all of your bases, even though the reality is that most audits will just look at returns from the past one to three years.
Guidance when working with the IRS
Going through an audit with the IRS can be complex, especially if they have requested extensions and you have a complicated tax history. It can help to have experienced legal guidance from an attorney at this time.